For Newsweek’s Latin America Correspondent, It’s the Stocks That Count

Newsweek’s right-wing Latin American correspondent Mac Margolis (7/2/10) is once again playing games with statistics. After the obligatory attack on Venezuela’s Hugo Chavez as a “chest-thumping autocrat,” Margolis gets down to the business of praising his favorite Latin American country, Colombia, as a country that deserves “lead billing” among the “new stars of the emerging markets”:

In the past eight years, the Andean nation has gone from dud to dynamo: foreign investment has risen 250percent. Its stock index is up 15percent this year, and 35percent (versus Brazil’s 14percent) over the decade.

Since Margolis makes the comparison between Colombia and Brazil, let’s look at a more meaningful one: In 2000, per capita GDP in Colombia was $6,200, and Brazil’s was $6,150 (figures adjusted for purchasing power). In 2009, the last year available, Colombia’s was $8,200, and Brazil’s was $9,400. So Brazilians, who started the century just slightly behind Colombia in economic output, are now 13 percent ahead–regardless of how well those nations’ stock investors are doing.

On top of that, Colombia is “the only major country in Latin America in which the gap between rich and poor has increased in recent years,” as the Washington Post‘s Juan Forero (4/19/10) reported, citing the U.N. Economic Commission on Latin America. Twenty-three percent of Colombians live in extreme poverty, versus 7 percent of Brazilians, according to the UN.

It seems that Margolis picks his “duds” and “dynamos” based on ideology, not economics.

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Extra! Magazine Editor Since 1990, Jim Naureckas has been the editor of Extra!, FAIR's monthly journal of media criticism. He is the co-author of The Way Things Aren't: Rush Limbaugh's Reign of Error, and co-editor of The FAIR Reader: An Extra! Review of Press and Politics in the '90s. He is also the co-manager of FAIR's website. He has worked as an investigative reporter for the newspaper In These Times, where he covered the Iran-Contra scandal, and was managing editor of the Washington Report on the Hemisphere, a newsletter on Latin America. Jim was born in Libertyville, Illinois, in 1964, and graduated from Stanford University in 1985 with a bachelor's degree in political science. Since 1997 he has been married to Janine Jackson, FAIR's program director. You can follow Jim on Twitter at @JNaureckas.

well ,well lets take a look at Columbia (radio and movie making ) someone from the B > U> S> H ;began a large investment program trade for the wealthy COLUMBIAN and drug traffic ; cut out the killing and work together ;The hoods are now in MEXICO. Why then have we not heard of the Peaceful Columbians ?who are they ? show us people and their positions .. MAYBE THE CITIZENS OF THE U.S.A. (UNITED SHEEPS OF ARABIA AND ISRAEL ) have taken over … thank you … take a look at their country and economy ? what stocks are leading the way ? Why can’t we help CUBA . ? Because like CHAVEZ ,they know BUSH is criminally insane /

It’s interesting that countries with more equal distribution of wealth tend to have better economic growth patterns than the more economically polarized. Most businesses need more consumers to sell to, not higher incomes for their owners at the expense of their consumers.

Just as intelligence can’t be accurately measured by one number (like the IQ*), one-number measures of a country’s economy are virtually useless except to intentionally mislead. Even more honest measures (like the Gini Coefficient, for instance), need to be used with other measures (like average income) to start giving a true representation of that state’s economy.

“Foreign investment” in a non-industrialized/’third-world’ country isn’t even necessarily positively correlated with desirable local economic growth – – it too often amounts to pillaging of the country’s resources and/or exploiting the desperately poor for their labor at meager compensation. As we’ve seen even in this country not too long ago, an ascendent stock market doesn’t necessarily indicate a healthy economy, but it simply indicates a heated financial sector which can ‘cool’ overnight, dropping by 5 or 10% in one day, when the economy hasn’t changed at all.